Will Congress Be Able to Break Up Big Tech?

Will Congress Be Able to Break Up Big Tech?

By The Fatty Fish Editorial Team - February 6, 2023

The effort to break up Big Tech has stalled in Congress. The House has taken bills that could break up the tech giants off the table for now. As a result, efforts to break up Big Tech have shifted to the courts. The Justice Department and eight states filed a suit aiming to break up Google’s lucrative ad business, and a 2020 suit filed under President Donald Trump alleging Google monopolizes online search is headed for trial later this year. Meanwhile, Federal Trade Commission Chair Lina Khan, an anti-monopoly crusader, is pursuing a suite of ambitious lawsuits aiming to break up Facebook parent Meta and block heavyweights such as Microsoft from gobbling up smaller firms, while seeking to rewrite federal rules on antitrust enforcement. And the Supreme Court has heard arguments in Gonzalez v. Google, a case that could weaken internet companies’ prized liability shield.

Meanwhile in the Senate, Sen. Mike Lee (R-UT), joined by Sens. Amy Klobuchar (D-MN), Ted Cruz (R-TX), Richard Blumenthal (D-CT), Marco Rubio (R-FL), Elizabeth Warren (D-MA), Eric Schmitt (R-MO), Josh Hawley (R-MO), Lindsey Graham (R-SC), JD Vance (R-OH), and John Kennedy (R-LA), have introduced the Advertising Middlemen Endangering Rigorous Internet Competition Accountability (AMERICA) Act. The proposed bill would restore and protect competition in digital advertising by eliminating conflicts of interest that have allowed the leading platforms in the market to manipulate ad auctions and impose monopoly rents on a broad swath of the American economy.

The AMERICA Act restores and protects competition in digital advertising in two ways:

Prohibits large digital advertising companies from owning more than one part of the digital ad ecosystem if they process more than $20 billion in digital ad transactions.
Requires midsize and larger digital advertising companies that process more than $5 billion in digital ad transactions to abide by several obligations to protect their customers and competition.

The AMERICA Act would be enforced by the Department of Justice and state attorneys general. It also includes a private right of action for violations of the best interest, transparency, and other requirements imposed at the $5 billion threshold when committed by companies over the $20 billion threshold. Here are a series of opinion pieces we found of interest relating to Congress and efforts to break up Big Tech.

Washington Wants to Break Up Google. But Europe Is Way Ahead.

In an opinion piece for POLITICO, “Washington wants to break up Google. But Europe is way ahead,” Mark Scott, chief technology correspondent at POLITICO, argues that Washington is behind other parts of the world that have updated their antitrust rules to keep pace with the digital age. Regulators across the Atlantic and in Australia are writing new laws and regulations to keep powerful tech platforms in check. The Department of Justice, in contrast, is using the Sherman Antitrust Act, which was passed more than a hundred years ago.

Stalled bipartisan legislation, known as the American Innovation and Choice Online Act and supported by Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) among others, would stop Big Tech companies from preferencing their own services over those of rivals and would ban current limits on how smaller competitors use the dominant services to target potential customers. The new U.S. antitrust proposals ran into industry-led efforts that claimed they would harm innovation, restrict consumer choice, and undermine national security. Read the full article on POLITICO.

Republicans and Democrats Unite Against Big Tech Abuses

Writing an opinion piece for the Wall Street Journal, “Republicans and Democrats, Unite Against Big Tech Abuses,” President Joe Biden urges Democrats and Republicans to come together to pass strong bipartisan legislation to hold Big Tech accountable. He argues that the risks Big Tech poses for ordinary Americans are clear, as these companies collect huge amounts of data on the things we buy, websites we visit, and places we go, and on our children. In addition, Big Tech companies have pushed out mom-and-pop businesses from their platforms, disadvantaged them, or charged them outlandish prices, making it difficult for them to compete and grow, and thereby stifling innovation.

Biden writes that currently there are limits on existing authority to hold Big Tech accountable stressing the need for bipartisan action from Congress. He argues that bipartisan proposals are required to protect our privacy and our children; to prevent discrimination, sexual exploitation, and cyberstalking; and to tackle anticompetitive conduct. Read the full article on Wall Street Journal.

U.S. Regulatory Action on the Tech Sector May Come Too Late — Or Not at All

In an opinion piece for Financial Times, “US regulatory action on the tech sector may come too late — or not at all,” Marietje Schakke, international policy director at Stanford University’s Cyber Policy Center, argues that decisive regulatory action on Big Tech is unlikely to occur, in part because Big Tech companies are confident that their lobbying spend of around $100 million over the past two years will continue to steer proposed laws away from fruition.

In 2022, initiatives toward greater antitrust regulation, data protection, and even online child protection were never brought to a vote or won over the majority. She argues that once European Union (EU) rules prove their promise in practice, American internet users and lawmakers can observe that U.S. technology companies are perfectly capable of complying with laws that ensure a fairer economy, respect for civil rights, and the protection of consumers and investors. Schakke adds that the impact of the EU’s new rules on crypto assets, social media platforms, and artificial intelligence depend on successful enforcement. Read the full article on Financial Times.

Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

The Fatty Fish Editorial Team

The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.